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Jun 10, 2008
Contradicting an earlier Dutch study, a new study finds that overweight people have higher lifetime health care costs after all. So instead of getting a lifetime discount on their private health insurance and Medicare premiums, the obese should pay a bit more. But not that much more. Just eyeballing it, I would assess the fat tax at $300 per excess pound over a lifetime. That's less than 2 cents per excess pound per day of adult life — roughly the cost of an M & M.
See my previous FYI.
2 Responses to “Fat May not be Good After all”
June 11th, 2008 at 10:32 am
You neglected to mention that the optimal fat tax varies a lot by race and sex. For example, pound for pound of blubber, a black female should pay only about one-third as much as the amount assessed on a white male – assuming the study is otherwise accurate.
Also, at Publix in Miami, the cost of M&Ms with peanuts is closer to 5 cents a pop.
Just keeping you on your toes.
Ronda
June 19th, 2008 at 7:21 am
Jason Shafrin, of the Healthcare Economist Blog, recently had an interesting post pondering whether the obesity epidemic is a public health problem? As evidence he cites an NBER paper by Philipson and Posner that explains how obesity more closely fits the criteria of a “private” health problem (i.e. it’s not a social cost).
The argument for government intervention against obesity posits that much of the health-related costs due to weight gain will be passed on to Medicaid and Medicare thus creating a negative externality. There are two counter-arguments, however. 1) Higher mortality rates among the obese reduce Social Security payments, which offsets any additional costs for health care. 2) If obesity creates a negative externality the best solution is to allow health insurers to experience-rate enrollees, charging higher premiums to those with above average expected costs.